organizational performance as an outcome of …
TRANSCRIPT
Mbah Juel
ORGANIZATIONAL PERFORMANCE AS AN OUTCOME OF
EMPLOYEE MOTIVATION
How employees of PEPT OY are committed to their organization
Thesis
CENTRIA UNIVERSITY OF APPLIED SCIENCES
International business
May 2019
ABSTRACT
Centria University
of Applied Sciences
Date
May 2019
Author
Mbah Juel
Degree programme
International Business
Name of thesis
ORGANIZATIONAL PERFORMANCE AS AN OUTCOME OF EMPLOYEES MO-
TIVATION. How employees of PEPT OY are committed to their organization
Instructor
Juha Enlund, PEPT OY
Pages
41
Supervisor
Sara Ahman
The aim of this thesis was to find out the impact of employees’ commitment on the organizational
performance and how the different type of motivations influence their output. It also brought about an
understanding on what motivates an employee to put in more effort for the overall benefit of the organ-
ization, the thesis also provided an avenue for organization to get more information on what employees
have in mind about their job or how employees perceive their present job and what changes the organ-
izations need to improve on.
The thesis also explained various motivational theories and how they can be used by companies. Also,
the thesis studied organizational performance and tried to bring about some aspect the organization
needs to improve on to have a better output from its employees.
Key words
Employee commitment, Motivation, Organizational Performance, Extrinsic and Intrinsic, Satisfaction.
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CONTENT
1 INTRODUCTION ................................................................................................................................ 1
2 COMMISSIONER: PEPT OY AB ..................................................................................................... 3
3 MOTIVATION .................................................................................................................................... 7
Extrinsic motivation ....................................................................................................................... 7 Intrinsic motivation ........................................................................................................................ 8 The Relationship Between Extrinsic And Intrinsic Motivation ................................................. 9 Financial motivation .................................................................................................................... 11 Non-Financial Motivation ........................................................................................................... 11
Organizational performance ....................................................................................................... 12
4 MOTIVATIONAL THEORIES ....................................................................................................... 14
Maslow's Hierarchy of Needs theory .......................................................................................... 14 Herzberg's Motivation Hygiene Theory (two factor theory) ................................................... 16 McClelland's theory ..................................................................................................................... 18
Theory X and Y of Douglas McGregor ...................................................................................... 19 ERG theory of Alderfer (1969) ................................................................................................... 19
5 RESEARCH METHODOLOGY ..................................................................................................... 21 Research Design ........................................................................................................................... 21 Validity of a study ........................................................................................................................ 23
6 PRESENTATION AND DISCUSSION OF RESULTS ................................................................. 24
Dem oragrphic information ........................................................................................................ 24 Evaluation of financial motivation ............................................................................................. 27
Evaluation of organizational performance ................................................................................ 29 Evaluation of non-financial motivation ...................................................................................... 32 Discussions .................................................................................................................................... 33
7 CONCLUSION .................................................................................................................................. 35
REFERENCES ...................................................................................................................................... 38
APPENDICES
PICTURES
PICTURE 1.Energy exhibition.................................................................................................................4
PICTURE 2. Scaffolding construction around tanks...............................................................................5
PICTURE 3. Insulation works on small pipes...........................................................................................6
FIGURES
FIGURE 1. Depiction of Maslow’s Hierarchy of needs.........................................................................16
FIGURE 2. Herzberg motivational hygiene theory................................................................................18
FIGURE 3.The responds to copies of questionnaires issued...................................................................25
FIGURE 4 . Sex distribution of respondents...........................................................................................26
FIGURE 5. Marital status of the respondents..........................................................................................27
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FIGURE 6. How long have you worked with Pept OY..........................................................................27
FIGURE 7. Branch offices of PEPT OY.................................................................................................28
FIGURE 8. Positions held by respondent................................................................................................29
FIGURE 9. Financial motivation triggers me to work efficiently............................................................30
FIGURE 10. Increase in output quality of employees when satisfied with motivation………………...31
FIGURE 11. Employees turn to be more efficient when satisfied with pay package..............................32
FIGURE 12.Emlpoyees become effective when satisfied with pay.........................................................33
FIGURE 13. Increase in organisations sales ……………………………………………………….….34
FIGURE14.Increases output when they are satisfied with motivation....................................................35
FIGURE 15. Evaluation of non-financial motivation ……………………………………………….…36
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1 INTRODUCTION
At a time when good remuneration is seen as one of the major policies organizations adopt to increase
their workers’ performance and thereby increasing the organizational productivity, companies are con-
fronted with numerous challenges such as employee turnover, changing workplace environment, con-
sumer preferences and technological changes among others. Most employers of labor and management
practitioners need to realize the fact that for their organizations to gain competitive advantage and meet
up with the contemporary changes, the performance of their employees has a great role to play. The
performance of these employees is vital, not only for the growth of the organization, but also for the
growth of the individual employees.
For any organization to be adaptable to the changing times and attain its goals and objectives, it must
know its outstanding workers, those who need additional training and those not contributing to the effi-
ciency and welfare of the organization. These can be achieved by putting in place a motivation system
that would trigger the employees to put in their very best in whatever they are assigned to carry out. In
recent years, PEPT OY has witnessed a high rate of employee turnover and this seems to have been
accounted for by the different types of motivation given to them. Some of these motivations take the
form of work content such as increased responsibility, achievement, authority and room to confront more
challenging tasks as well as pay package and the relationship between workers.
The aim of this thesis is to examine the effect of financial motivation on the performance of the em-
ployees of PEPT OY. Motivation is said to be a strategy adopted by management to trigger employees
to act according to management thinking. Specifically, this thesis is also to evaluate the influence of
employee non-financial performance on PEPT OY. The objective of this study was to conduct research
on the employees of PEPT OY regarding if employee’s motivation has any impact on their job perfor-
mance and how they can be motivated to improve on their work efficiency.
The commissioner PEPT OY is a family owned business and it is into scaffolding solutions, insulation
work and industrial maintenance. PEPT OY business policy is built on honest and close relationships
together with a high standard business ethics. The organization recognizes their employees as being
worth their weight in gold and makes sure their employees are supported in managing a healthy lifestyle
with exercise and individual coaching as well as developing professionally through special training.
Considering the high rate of employee turnover on the organization today and the experiences of the
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researcher, this thesis is of paramount importance not only to the researcher as it broadens his frontier
of knowledge in business management and effective managerial decision making. The management of
PEPT OY will have much to benefit from it as it is intended that it provides an in-depth insight on how
satisfactory motivation methods can be adopted to profit both the organization and the employees in the
race of meeting up with the present-day workplace difficulties.
The theoretical part of this thesis talks about motivation and employee’s commitment. The emphasis is
placed on comparing how the different types of motivation influence employees and how leadership
style helps to improve on the organizations output. Part of this thesis comprises of the motivation theories
in business management and administration and brings about the knowledge on how they are applicable
in real life situations. The introduction throws light on the problem statement while the theoretical sec-
tion overviews related literature on the topic under investigation. The methodology section looks at the
instruments used, the methods of data collection and the method of data analysis. The results of the thesis
will be immediately proceeded by discussion and conclusion. The thesis shall end with a list of sources
consulted and a questionnaire that will be used to collect information. The findings are analyzed, and
further suggestions are made on how to improve and handle employees’ work-related matters in the
company for the future.
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2 COMMISSIONER: PEPT OY AB
PEPT Oy Ab is a family owned business and was established in 1992 by Juha Enlund who is now work-
ing as the Sales and Executive Director for the company. PEPT Oy Ab is owned by Juha Enlund who
owns (52%) and his two sons André Enlund (24%) and Tony Enlund (24%) respectively. PEPT has
lately been growing steadily and the actual turnover of the company as of 2017 was 27 million Euros.
The head office is located in Kaustinen, at the Emet Industrial Estate. Additionally, there are separate
units in Pietarsaari and Kokkola. From time to time there are also other national and international work
sites. Since 2015 PEPT Oy Ab also has a subsidiary company in Sweden called PEPT Service Ab. This
company has three most important service sectors of which are scaffolding solutions, insulation work
and industrial maintenance. For industrial upkeep and maintenance shutdowns PEPT offers service, ca-
pacity and know-how, which is leading in its field in Finland currently. It operates in a wide sector of
various industrial maintenance projects. On average PEPT has 230 employees every year. Approxi-
mately 20 persons are working now in the main office.
In 2016 PEPT OY had one of its biggest project in which lasted for 2 years in insulation and mounting
of scaffolds for the construction of a new paper and pulp factory (Metsä) in Äänekoski and was currently
the biggest project going on in the whole of Scandinavia in that year .There were over 1500 workers on
site working for PEPT of which most were subcontracted from other subcontracted companies such as
The Scaffolders from Poland and JE Henkilöstöpalvelut from Pietarsaari where most of the companies
contracted workers are being taken.
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PICTURE 1. Energy exhibition (PEPT 2018)
On scaffolding, PEPT OY can supply, build and dismantle complete scaffolding systems, emergency
lighting and maintenances, insulation and clothing also with sheet metal works. The model of scaffold
used by PEPT is the ALFIX module Plus II-model which is suitable for every construction site in the
whole of the Scandinavia. At PEPT Oy AB the management considers it important with its own attitude
and values to encourage all the different levels of the organization to act based on the organization’s
common quality environment. The effective occupational safety, environmental and quality systems
guarantee an environmentally friendly and safe way to work. The International Organization for Stand-
ardization (ISO)14001 Environmental Standard was audited in May 2012. In addition to that, PEPT Oy
Ab is a partner and member of the Green Company Effect network which is an open green idea bank
which is currently being built in compliance with the Occupational Health and Safety Management Sys-
tem (OHSAS) 18001 Standard which is part of everyday operations. This Standard was audited in May
2012 and focuses strongly on OSH activities. The quality of the operations is ensured by operating in
accordance with our ISO 9001 quality certificate and every site is audited internally every day. On safety
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at PEPT OY, their workers have undergone training to adopt the right attitude at work and the environ-
mental safety and health occupational safety card is required by all workers before they can be allowed
to work on site. Also, the organization sees that the workers are provided with right working kit which
are required by the Finnish law. Through good services and work PEPT OY gets good feedback from
its customers which on the other hand reflects to their common working environment in a positive way.
Also, constructive feedback regularly is also a plus that makes the company grow more and more as
years goes by. PEPT OY provides insulation for pipelines, equipment and tanks from the planning stage
to the finished product. The company uses their own scaffolds to speed up their work. Also, PEPT OY
uses a high customized and a monitoring software for project tracking which helps to efficiently monitor
and report on the progress of the work to its customers’ OY delivers both standard parts that are custom-
ized to the customers’ needs. Also, PEPT design and make customaries parts to suit customers need.
PICTURE 2. Scaffolding construction around tanks. (Äänekoski 2017)
On industrial maintenances PEPT have multi-skilled expertise who can do all scaffolding systems, dem-
olition work, safety lighting, maintenance work as well as insulation and sheet metal work from the same
supplier to save our customers considerable time and costs. This flexible maintenance contract and pro-
active maintenance reduce shutdown time for the customer and the customers. Their capacity and net-
work covering the whole of Finland enable maintenance of large complexes.
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PICTURE 3. Insulation works on small pipes. (Äänekoski 2017)
The area of study gives the boundaries within which the results of the findings will be interpreted. The
study is carried out in Pept OY’s head office located in Kaustinen at the Emet Industrial Estate and its
branch offices of Pietarsaari, Sotkamo, Sodankylä, Seinäjoki and Kokkola located all over Finland.
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3 MOTIVATION
Every organization is pre-occupied with what should be done to achieve high levels of performance
through its workforce. This means giving utmost attention to how individuals can best be motivated
through means such as incentives, rewards, leadership, recognition, promotion among others not leaving
out the organization context within which they carry out the work (Armstrong 2006). The study of mo-
tivation is primarily concerned with why people behave in a certain way. In general terms, it can be
described as the direction and persistence of action. It is concerned with why people choose a course of
action in preference to others, and why they continue with chosen action, often over a long period, and
in the face of difficulties and problems (Mullins 2007). Motivation is therefore said to be at the center
of how innovative and productive things are done within an organization. It has been established that
motivation is concerned with the factors that influence people to behave in certain ways (Arnolds &
Venter 2007). established three components of motivation which are Direction, Effort and Persistence.
Direction which is what the person is trying to do, Effort which is how hard the person is trying and
Persistence which is how long the person keeps on trying. Employees are generally compelled internally
or externally to direct their efforts towards course and stay focus to it in which case we have extrinsic
and intrinsic motivation. (Armstrong 2006.)
Motivation can be classified as intrinsic and extrinsic motivation. Intrinsic or internal motivation and
extrinsic or external motivation both differs in the source of pressure or pleasure that boost each of them.
Kousez and Posner (2012) elaborates further by explaining that individuals are internally motivated
when they seek pleasure, interest, satisfaction of curiosity, personal challenge in their work.Aso that
individuals are externally motivated when they engage in their jobs in order to obtain certain goals that
is different from the work itself .
Extrinsic motivation
It is related to tangible rewards such as salary and fringe benefits, security, promotion, contract of ser-
vice, the work environment and conditions of service. These are what needs to be done to or for people
to motivate them. They are often determined at the organizational level and may be largely outside the
control of the individual managers. Extrinsic motivators can have an immediate and powerful effect but
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will not necessarily last long (Mullins 2007). The intention to act in a way is not from within the indi-
vidual. Psychological forms of extrinsic motivation can include praise and public acclaim like for
example ,a child might clean her room in order to receive positive praise from her parents. An actor
might perform in a role in order to obtain attention and claim from his audience. In both of these
examples, while the reward is not physical or tangible, it is a type of motivating reward that is external
to the actual process of participating in the event. (Sansone & Harakiewicz 2000.)
While the large majority would propose that intrinsic motivation is preferable, it is not constantly con-
ceivable in all situations (Hagemann 1991, 42–43). Now and again, individuals just want to take part in
an action. Though excessive motivation might be risky, yet when used correctly, external motivation can
be a helpful toll. For instance, external motivation can be used to motivate individuals to finish a work
task or school assignment in which they have no inner interest. Eternally motivated person thus turns to
function because of an event such as being noticed and rewarded for a work or a task completed in time.
Such persons are therefore said to have been motivated externally. Extrinsic motivative factors such as
salary and promotion are the policy of the organization and the management to promote and maintain
positive working conditions, supervision and security. (Peltonen 1987.)
Intrinsic motivation
This is also known as internal motivation and it is related to psychological rewards such as the oppor-
tunity to use one’s ability. This reward system also deals with a sense of challenge and achievement,
receiving appreciation, positive recognition, and being treated in a caring and considerate manner. Psy-
chological rewards are those that can usually be determined by the actions and behavior of the individual
manager to drive people to work harder (Mullins 2007). Intrinsic motivators are concerned with the
quality of work life and are likely to have a deeper and longer-term effect because they are inherent in
individuals and not imposed from outside .It is necessary for an intrinsic motivated person to be able to
feel the power to control and to decide on their own things, to feel they are good at what they do and
that they have the needed skills required for their task. (Deci 1975.)
The motivational process begins with an inner drive and needs that triggers to motivate the individuals
to work towards certain goals or objectives. This inner drive may be caused by needs, desire, expecta-
tions or anticipation (Armstrong 2006). The satisfaction of these needs or desires will cause individuals
to behave in a way to achieve the targeted goals. The realization of these goals brings satisfaction which
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serves as a re-enforcement for motivation which is also the inner drive. It should however be noted that,
intrinsic motivation is higher when autonomy, belonginess and competence are high. Thus, induvial
coaching is one of the best ways to motivate people internally and to help them bring out their best not
necessarily depending on the reward but on the internal joy and satisfaction derived after achieving the
goal. (Denny 2009.)
The Relationship Between Extrinsic And Intrinsic Motivation
The difference between intrinsic and extrinsic motivation is clear, yet analyst contends that intrinsic and
extrinsic motivation additionally affect one another Organ (2005) claims that in a few cases extrinsic
motivation can be same as intrinsic motivation. He argued that if money is regulated contingently, it
minifies intrinsic motivation. Be that as it may, this occasion won't happen if the money is non-unex-
pectedly conveyed. Organ react to this dialog by expressing that although extrinsic motivation can work
contrary to intrinsic motivation, it can likewise have a fortifying impact. "when the platform of extrinsic
motivation is dealt with, intrinsic motivation can prompt elevated amounts of fulfillment and perfor-
mance". He went further to state in his research that both extrinsic and intrinsic qualities can motivate
employees to do their separate work, however both motivational types can have different impacts on
workers (Venter 2007). According to Medonca (2007), it can be explained that employees can be intrin-
sically and or extrinsically motivated to perform their work and reinforce each other. However, in some
cases extrinsic motivators can also minify intrinsic motivation (Deci 1975). Moreover, researchers have
argued that not all people are motivated equally some employees are more motivated extrinsically and
others are more extrinsically motivated.
Motivation in the workplace is a widely researched topic (Holme & Solvang 1997, 163) and earlier
research has been conducted by Maslow (1943) and Herzberg (1968), who were 2 great innovators at
their subject. Also, many definitions have been composed such as Herzberg’s definition of motivation
in the workplace which is performing a work-related action because you want to. Some disagreements
took place concerning the important of certain aspects of motivation, but consensus is in the fact that
motivation is an individual process and can be deliberate, it is multifaceted and that is the reasons why
motivational theories is to predict behavior (Mitchell 1982, 80-88). The relationship between intrinsic
and extrinsic motivation also explained that individuals are intrinsically motivated when they look for
pleasure, interest, satisfaction, enjoyment and curiosity, self-expression or personal challenges in their
work. Also, an individual is extrinsically motivated when they are working so as to gain some goal that
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is different from the work itself (Amabile 1993). Both intrinsic and extrinsic motivators are necessary
in motivating employees. It is therefore argued that managers must not only concentrate on the necessary
factors, since managers need to address all hygiene and motivator factors to motivate employees.
Extrinsic motivation is an external form of motivation. For example,if your boss sets a deadline on a
project and your bonus is tied to the deadline, that is a very clear form of extrinsic motivation. Infact,
this example includes two extrinsic motivators which are your boss's expectations and the bonus. So,
extrinsic motivation doesn't always have to be another person,but it is some outside demand,obligation,
or reward that requires the achievement of a particular goal. Intrinsic motivation, however, is an internal
form of motivation. You strive towards a goal for personal satisfaction or accomplishment. You may
even work towards a long-term reward such as the development of a business or participating in a
competition, but the primary motivator is internal. (Storey 2013.)
Research initiated by Deci offers evidence that when too many extrinsic rewards are provided, work
effort may decline. He found that the introduction of extrinsic rewards for work previously performed
for intrinsic pleasure tends to reduce motivation. Over abundant extrinsic rewards are likely to lessen
the need to seek intrinsic satisfaction. People may perceive extrinsic rewards as diminishing their control
of the work situation. However, if rewards serve primarily as feedback, this negative effect are minimal.
For organisations to get the best from their workers, managers should emphasize anticipated reward
value.So the manager’s job is to strengthen effort performance-reward expectancies. For employees who
have difficulty in attributing outcomes to their performance, managers must make sure they realize
performance-reward connections and provide performance feedback. (Amabile 1993).
Employee motivation system comprise of the organizations joined arrangements, procedures and prac-
tices for motivating its workers with a connection to their commitment, aptitudes and capability and their
market value (Kawesa 2004). The motivational system of employees has a plans and procedures with a
structure which will give and keep up proper kinds and levels of pay, benefits and different types of
remuneration. The motivational system includes financial motivation (Fixed and variable pay) and the
employees benefits, which together sums up as compensation. The system additionally consolidates non-
financial related motivation (acknowledgment, adulate, accomplishment, obligation and self-improve-
ment) and in most cases, performance management processes. (Armstrong 2006,4.)
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Financial motivation
These are motivators that are in terms of money or cash such as salaries, and efficiency wages, direct
financial benefits, life insurance bonus, transport allowance, accommodation allowance, medical allow-
ance, gain sharing, and tax breaks, among others. According to “merit pay” or “performance pay” ap-
proach, a standard for individual performance is set, such as increased worker productivity, and if a
worker meets or exceeds this standard, he or she receives a bonus, or a salary increase (Kawesa 2004)
Merit pay is frequently used in the private sector as a management tool to achieve organizational goals.
The main argument in favor of merit pay is that it can foster individual motivation by recognizing effort,
achievement and rewarding it in a concrete way. Performance-based compensation is another form of
merit pay which emphasizes teams results. In these schemes, incentives are created to encourage workers
to work together to achieve collective goals. For instance, an organization’s performance award that
links bonuses to organizations’ goals and benchmarks. However, in the Finland’s context, it is believed
that organizations motivate individual employees to perform regardless of their academic qualifications.
At times they are rewarded depending on the number of distinctions output produced by workers of the
various units. This system is criticized on grounds that an employee’s performance depends on the sys-
tem in the organization and it is not individual efforts that bring out such results. (Armstrong 2006.)
Non-Financial Motivation
These are described as motivators that are not in terms of money or cash. They include study leaves,
work environment, conditional/occupational/health, safety, recreational facilities, infrastructure, social
amenities, job security, professional development, training opportunities, affection and passion, sta-
tus/prestige, recognition, sense and duty, promotion, respect, achievement and challenging work. Or-
ganizations with positive desires could put in place models with a reasonable degree of motivation which
could be accomplished through non-financial reward frameworks by the arrangement of chances for
learning and improvement of skills. However, personnel management aptitudes still have a vital task to
carry out in situating their own motivational abilities to get individual inside their organization and to
give in their best performance by making great utilization of the motivational system and procedures
given by the organization. (Armstrong 2006, 221.)
Acknowledgment is appreciation of performance by the organization of a work done by the group or
colleague. In common language, it is occasionally expressed as "I caught you doing something great". It
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is a methodology of demonstrating gratefulness for the uncommon or additional effort done by a worker
inside an organization. Acknowledgment has two critical objectives to support the representative or
group to proceed the conduct and to urge different workers to do likewise. Most group acknowledgment
plans fall into celebrating organizational target routinely as an occasion created to concede the achieve-
ment finishing of critical organization objectives. This is to make a greater awareness or to help individ-
uals to remember the significance of the objectives accomplished inside the organization. Still, when
recognition is acting in isolation of motivation and equity rewards, it’s frequently loses much of its
appeal. (Wilson 1995, 330.)
According to Herzberg, supervisors don't motivate employees by allowing workers higher wages, more
advantages or status symbol. Rather, employees are spurred by their very own effort to accomplish
something unmistakable at a demanding task. The administrator's activity at that point isn't to propel
workers to get their assignments achieved, rather, the manager should supply more opportunities for
individuals to accomplish their task, so they will end up being motivated (Marchington and Wilkinson
2005, 368) motivating an employee through an assortment of, divisions or capacities is especially a
phenomenal way to deal with open the workers to more challenging task. This is extremely alluring to
workers who have been on an occupation for quite a while and are never again debated by the activity
however rather who have a firm requirement for activity to change. By giving the chance to change jobs,
the management has positively uncovered the employees to new issues and it will give the employees to
put their best with the end goal to get a chance to achieve to desires (Stone 2003,40–41). In this way
deliver an empowering domain for a greater motivation and performance inside the organization.
Organizational performance
Organizational performance comprises the real output or results of an organization as measured against
predetermined goals and objectives (Virgina 2009). It can also be understood by how well an organiza-
tion is doing to achieve its goals. It is very important for the managers of an organization to know the
performance rate of their organization to be able to know what changes they can introduce to keep abreast
with the evolving evolutions. Without the knowledge of the performance, it will be difficult for the
executives of the organization to know when exactly changes are needed in the organization. From past
literatures, performance seem to be a very complex concept. More attention needs to be given to how
performance is assessed. Superior performance means that the work is done effectively and efficiently.
Organizational performance refers to a long-range effort to improve an organizations problem-solving
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capacity and its ability to cope with changes in its external environment with the help of external or
internal behavioral- scientist practitioners, or change agents, as they are sometimes called. According to
Chen (2002), organizational performance is all about goal accomplishments through the transformation
of inputs into outputs. From a content perspective, performance is all about economy, efficiency and
effectiveness. It brings out the relationship between effective and minimal cost (economy), the outcome
and achieved outcome (effectiveness), between realized and effective cost (efficiency). An organization
may access its performance based on, profit, sales volume, market share and staying within the time
bounds.
Researchers have different opinions of what performance is all about. Organizational performance con-
tinues to be an issue in the management research circles. Javier (2002) equates performance to the fa-
mous 3Es economy which are efficiency and effectiveness of a certain programmed of activity. Accord-
ing to (Storey 2013) explanation, he states that organizational performance encompasses three specific
areas of a firm’s outcomes which are financial performance (profits, return on assets, return on invest-
ment), product market performance (sales, market share), and shareholder return (total shareholder re-
turn, economic value added, etc.). Organizational performance is the organization’s ability to attain its
goals by using resources in an effective and efficient manner. We can put organizational performance as
the actual output or results of an organization as measured against its goals and objectives. Performance
should not be confused with productivity; according to Ricardo (2001), productivity is a ratio depicting
the volume of work completed in a given amount of time. Performance is a broader indicator that could
include productivity as well as quality, consistency, effectiveness, efficiency and other factors.
A study by Chien (2004) found that there were five major factors determining organizational perfor-
mance, which are leadership styles and environment, job design, Organisational culture, Model of
motive and Human resource policies. The concept of performance explains both what has been achieved
and how it has been achieved and can be measured in several different ways. The most obvious way to
measure what has been achieved and the approach used in many studies is by reference to key perfor-
mance indicators (KPIs) which are usually to do with financial results (profitability) or productivity.
Measuring the ‘how’ is more difficult. It must rely extensively on qualitative assessments of organiza-
tional capability or effectiveness. (Nworgu 2006.)
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4 MOTIVATIONAL THEORIES
This thesis is based on motivational theories, equity theories, Herzberg’s two factor model, Theory X
and Y, the needs hierarchy theory, ERG theory and Instrumentality theory. Equity theory is concerned
with the perceptions of people have about how they are being treated compared with others. To be dealt
with, equitably is to be treated fairly in comparison with another group of people (Armstrong 2006).
Equity involves feelings and participation and is always a comparative process. It is not synonymous
with equality which means treating everyone the same since it would be inequitable if they deserve to
be treated differently. Equity theory states that employees will be motivated if they are treated equitably
and demotivated if they are treated inequitably. It explains only one aspect of motivation and job satis-
faction although it may be significant in terms of morale.
Maslow's Hierarchy of Needs theory
Abraham Maslow believed that man is inherently good and argued that individuals possess a constantly
growing inner drive that has great potential. The needs hierarchy system, devised by Maslow (1943), is
a commonly used scheme for classifying human motives. It involves five categories of motives arranged
with lower-level needs on the bottom which must be satisfied first, before the higher-level needs come
into play .That is, it explains that only when workers get to be satisfied by the lower level of need they
want before they get to be motivated to go for the opportunity of having their next need up in his hier-
archy of satisfaction. For instance, a hungry man will need a wage to satisfy just his hunger at the present
before getting worried about securing a job contract. These needs were also explained that when they
become satisfied, it then stops from being a motivator (Wallace 2007, 277). These needs are displayed
on the graph below.
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FIGURE 1. Depiction of Maslow’s Hierarchy of needs (Adapted from 21st century 2015)
Physiological needs: These are basically the needs which are needed for live such as food, water, shelter,
clothing and sleep.
Safety needs: Protection against danger, threat, and deprivation. Behavior which arouse from uncertainty
with respect to continued employment or which reflects favoritism or discrimination, unpredictable ad-
ministration of policy are powerful motivators of the safety needs in the employment relationship at
every level.
Social needs: Giving and receiving of love, friendship, affection, belonging, association, and acceptance.
(If the first two levels are well gratified a person becomes keenly aware of the absence of friends).
Ego needs: Need for achievement, adequacy, strength, and freedom. This is the need for autonomy or
independence. Status, recognition, appreciation, and prestige. This is the need for self-esteem or self-
worth. Self-actualization needs: The need to realize one's potentialities for continued self-development
and the desire to become more and more of what one is and what one can become. (The conditions of
modern industrial life afford only limited opportunity for the self-actualizing need to find expression.
(Haimann Theo 2004.)
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The esteem needs, respect and trust: This type of need explains that human have a need to feel respected
and have self-esteem. This esteem presents the typical human desire to be accepted and valued by others.
People usually involves themselves in an occupation or what pleases them to gain recognition. These
activities give the person a feeling of recognition and some value.
Personal development need: According to Maslow, this need is mainly to get out of condition which are
mainly material to reach fulfillment. This level of needs is the desire to accomplish everything that one
can and to become the most that one can be. Two major postulates can be derived from Maslow's hier-
archy of need which are that a satisfied need is not a motivator of behavior. To the extent that lower
order needs become satisfied, the next higher order level of needs becomes the most proponent determi-
nant of behavior (Hamner & Organ 2005, 139). The extent that jobs incorporate elements that satisfy
some higher order human needs and determines their potential for motivating workers, A person's level
of motivation is closely related to the hierarchy of needs and attitudes. These needs will then determine
the individual route which the persons will take for the satisfaction of his ultimate need categorically
described by Maslow as self-actualization. This belief served as the basis for the assumptions of
McGregor's Theory Y point of view on motivation which was based on self-direction, self-control, mo-
tivation and maturity. (Mullins .2007, 258-260.)
Herzberg's Motivation Hygiene Theory (two factor theory)
Herzberg's motivation hygiene theory (Herzberg 1968, 53-62) is often called the two-factor theory and
focuses on those sources of motivation which are pertinent to the accomplishment of work. Herzberg
concluded that job satisfaction and dissatisfaction were the products of two separate factors which are
motivate factors (satisfiers) and hygiene factors (dissatisfiers) respectively. The motivative factors are
those factors that gives employees the reasons to work harder and gives them satisfaction. While the
hygiene factors are those that can lead to dissatisfaction and turn to slow down workers from given in
their best if they are absent such as companies benefit, good relationship with managers and a prospec-
tive future in the company. This theory further explains that there is a certain factor in a job place that
cause work satisfaction while a few others causes work dissatisfaction all of which act independently
from each other. It further explains that in a workplace, all the employees are different in that what can
motivate one employee will not be the same to make another employee feel motivated. Nathan (2007.)
17
Those factors that bring about motivation among others include achievement, company policy, recogni-
tion and supervision, work itself, working conditions, responsibility, interpersonal relations, advance-
ment, salary, growth, status, job security and personal life (Management Study Guide 2015). Herzberg
used the term "hygiene" in the medical sense, the sense that it operates to remove hazards from the
environment. (Duttweiler 2011) Herzberg identifies and compares the dynamics of hygiene and motiva-
tion as illustrated below.
FIGURE 2. Herzberg motivation hygiene theory (basic marketing and Global Approach14th ED 2012.)
According to Herzberg, hygiene cannot motivate, and when used to achieve this goal it can produce
negative effects over the long run. A "hygienic" environment prevents discontent with a job, but such an
environment cannot lead the individual beyond a minimal adjustment consisting of the absence of dis-
satisfaction. A positive “happiness" seems to require some attainment of psychological growth (Her-
zberg 1968). The hygiene’s have always been and probably always will be easier to measure, control,
and manipulate than the motivators. The motivators are more complex and subjective, and often too
elusive to measure but to the extent that management concentrates on hygiene’s, while at the same time
neglecting motivators. The proper management of hygiene is an important first step in applying Her-
zberg's two factor theory which is shown in a five-part process which are Identify the type of hygiene,
give hygiene for hygiene purposes, give hygiene for what hurts management of hygiene, keep hygiene
administration simple, give it and shut up about it. (Master class 2015.)
18
Th fact that job satisfaction is made up of two unipolar traits and it is not unique but remains a difficult
concept to explain. The opposite of job satisfaction would not be job dissatisfaction, but rather no job
satisfaction. Similarly, the opposite of job dissatisfaction is no job dissatisfaction (Herzberg 1968). Her-
zberg also says, "A deprivation in hygiene factors can lead to job dissatisfaction, but their amelioration
does not lead to job satisfaction". Hersey describes hygiene saying, Hygiene factors when satisfied, tend
to eliminate dissatisfaction and work restriction. But they do little to motivate an individual to superior
performance or increased capacity. There are three primary psychological states that significantly affect
worker satisfaction which are experienced meaningfulness of the work itself, experienced responsibility
for the work and its outcomes, knowledge of results, or performance feedback. The more that work is
designed to enhance these states, the more satisfying the work will be (Wallace 2007, 275). The dimen-
sion of job dissatisfaction differs psychologically from job satisfaction, but it is also associated with an
escalation phenomenon or what some have called she principle of rising expectations. The more people
receive, the more they want this clarifies Herzberg's escalating zero-point statement. According to
Mathis, hygiene factors provide a base which must be carefully considered if dissatisfaction is to be
avoided. Even if all the maintenance needs are taken care of, the people will still not necessarily be
motivated to work harder. (Medonca 2007.)
Herzberg suggested that the factors that lead to job satisfaction are primarily intrinsic, whereas those
leading to job dissatisfaction are primarily extrinsic. The cluster of intrinsic factors was found to include
the work itself, achievement, advancement, recognition and responsibility (kermally 2005). The cluster
of extrinsic factors was found to include supervision, interpersonal relations, working conditions, salary,
company policies, and administration at times, Herzberg seems to indicate that intrinsic factors will not
lead to job satisfaction if the extrinsic factors present in the work setting are deficient. An employee
experiencing a state of intrinsic motivation tends to be committed to the job and self-fulfillment through
it in a state of intrinsic motivation and the employee attributes job behaviors to outcomes which are
derived from the work itself. Such intrinsic outcomes are experienced by employees independent to the
involvement of others. (Lahti 2008.)
McClelland's theory
McClelland's concept of achievement motivation is also related to Herzberg's motivation-hygiene the-
ory. People with high achievement motivation tend to be interested in the motivators. People with low
19
achievement motivation are more concerned about the environment (Hersey & Blanchard 1982, 61).
Although not stated specifically in Maslow's need hierarchy, the need for achievement underlies self-
actualization (kermally 2005). McClelland proposed no lower order needs. While his need for achieve-
ment is not identical with Herzberg's motivators or Maslow's higher order needs, there are some simi-
larities. The major difference is McClelland's emphasis on socially acquired needs. Maslow is helpful in
identifying needs or motives and Herzberg provides us with insights into the goals and incentives that
tend to satisfy the needs (Hersey & Blanchard 1982, 59). One major means of increasing an employee's
level of intrinsic motivation is through changing the work. This can be done through job rehabilitation
which is also known as job enrichment (Herzberg 1968). However, (Aldag 1979) has said "Employees
dissatisfied with extrinsic factors are unlikely to respond well to job enrichment attempts". Job enrich-
ment, a significant intervention within OD (Organizational Development) and a critical element of qual-
ity of work life (QWL) projects is a direct application of Herzberg's theory and at least an indirect ap-
plication.
Theory X and Y of Douglas McGregor
McGregor (1960) places money in his theory X category and contends that it is a poor motivator. Praise
and recognition are placed in the theory Y category and are considered stronger motivators than money.
McGregor’s theory X and Y is relevant to this study as it conceptualizes the aspects of non-financial and
financial motivation and their effect on the performance of employees. This theory is in line with the
objectives of the study. Maslow’s Needs theory and Herzberg two-factor model are very fundamental as
they attribute the performance of employees to non-financial motivation. They argue that if money is
the only reward that someone receives by doing his/her job right, this undoubtedly will have a negative
reflection on an organization as the employees will always be money-minded and ignore the goals and
operations of the organization. The rewards must have the form of influencing the employee to feel
better concerning his or her achievements inside the company and from this success to feel as part of
this business. (Management Study Guide 2015.)
ERG theory of Alderfer (1969)
In trying to address the deficiencies of Maslow’s work, Alderfer (1969) formulated another model that
conceptualizes the hierarchy of needs known as ERG theory. This approach clusters Maslow’s five needs
20
into three groups of existence which corresponds to Maslow’s physiological and safety needs which are
relatedness like the love needs and growth, parallel to the esteem and self-actualization needs. Hypoth-
esized that an individual could focus on all three groups simultaneously without any specific order. In-
strumentality theory states that if we do one thing it will lead to another. In its crudest form, instrumen-
tality theory states that people only work for money. It assumes that people will be motivated to work if
rewards and penalties are tied directly to their performance, thus rewards are contingent upon effective
performance. This theory has a significant relevance in investigating the impact of financial motivation
on the performance of employees. It is in support of the most current systems of salary scale where
employees are rewarded basing on the number of years spent in an organization rather than performance.
(Odden 2000.)
About these studies, the above theories, most especially Maslow’s hierarchy of needs and instrumentality
theory, (Maslow 1943) are relevant to this investigation. Maslow’s hierarchy of needs is significant in
this study since it establishes in detail the effect of non-financial motivation like respect, recognition,
job security, and self-actualization on the performance of workers. The philosophy of instrumentality
theory is also admired in the study of organizational performance as it brings out clearly the impact of
financial motivation like permanent increase in pay for employees on performance. These theories have
a common principle that managers must determine the needs of their employees within the organization.
This will make them happy when they work and by that they will be motivated to perform at high levels
and more efficiently for the achievement of the organization’s goal. (Management Study Guide, 2015.)
21
5 RESEARCH METHODOLOGY
Research methodology is essential to settle prior to initiate research activities. It is needed to state basic
design, method and tool of research so that researcher can chose right instruments and process to
accomplish research objectives.This chapter presents the scope of the study, research area, research de-
sign, population of study, sample size, sampling procedure, research instrument, validity and reliability
of research instruments, administration of research instruments, scoring of instruments, and method of
data analysis and operational definition of key variables. On the theoretical part of the study which stands
on scientifically based research, books, articles and audio-visual material were utilized as the establish-
ment for the theoretical frame work. In the theoretical part the point was to build up an-up-to- date view
over the subject examined in the observational part of the study. This is accomplished by auditing present
and applicable sources of data.
Research Design
According to Nwogur (2006), a research design is a plan or blue print which specifies how data related
to a given problem should be collected and analyzed. It provides the procedural outline for the conduct
of any given investigation. This study was conducted using the survey research design which according
to Ezeh (2005) is a plan of study which enables researchers to use reliable techniques to collect data
from a well-defined population or systematically selected segment of the population for the purpose
determining the attributes of the population. This research design was used to assess the effect of em-
ployees’ motivation on the performance of PEPT OY. The adoption of this research design was influ-
enced by its low cost, greater efficiency, accuracy, flexibility, less time consuming and above all it pro-
vided the possibility of understanding the opinions of respondents without imposing any condition on
them. Therefore, the researcher could only describe, explain and or predict events following the opinions
of respondents. The major instruments of data collection were questionnaire and an interview that the
researcher used to collect information from the respondents on the study under consideration. Kothari
(2004), defined population as a member of any well-defined class of people, events or objects. The
intended populations of this thesis were exclusively the employees of PEPT OY’S head office and those
of its branch offices of Pietarsaari, Sotkamo, and Kokkola in all their grades and ranks as well as the
laborers on the field, gender, ages, race, tribe, culture, language, just to name this few ranging from 18
to 45 years and above.
22
The fact that the researcher could not afford a nationwide tour to all the over 6 sales points of PEPT OY
(Sodankylä and Seinäjoki) due to financial constraints and for economic reasons explains why the tar-
geted population of 160 employees was chosen from Kaustinen, Pietarsaari, Sotkamo, and Kokkola.
Sampling is the process of taking a subset of the subjects that is a representative of the entire population.
To achieve this objective, the researcher adopted the purposive and convenient sampling techniques in
selecting branch offices while the simple random sampling technique was used to select 150 respondents.
According to Lewis and Thornhill (2009), simple random sample is a type of sampling technique where
by every member of the sample size is chose by chance for the study and every member of the population
stand an equal opportunity of being selected from the chosen population fraction. 150 copies of ques-
tionnaires were designed and given to these respondents randomly selected amongst which included
junior and senior staff members as well as the laborers. As such, the target population was regarded as
been homogenous and could give the much-needed information for reliable results since it gives few
chances for sampling statistical errors.
To collect information on how employee motivation, affect the performance of PEPT OY, the researcher
used structured copies of a questionnaire and as a major instrument to sample the opinions of the re-
spondents. A questionnaire according to Uzoagulu (1998), is a carefully designed instrument for collect-
ing data in accordance with the specification of the research questions and hypotheses. It may be used
to ascertain facts, opinions, beliefs, attitudes and practices. Questionnaire is just a list of questions de-
signed to obtain certain information from whoever is mandated to answer the questionnaire.
A questionnaire was constructed in relation to the research objectives which was to find out the effect
of financial and non-financial motivation on the performance of PEPT OY and with the help of literature
information. This questionnaire was developed for completion by the employees and management of
PEPT OY. The questionnaire provided information on the employee motivation features and how they
are implemented at PEPT OY. The questionnaire was made up of four sections. Section A dealt with
demographic characteristics of respondents, Section B focused on financial motivation, section C fo-
cused on non-financial motivation while Section D concentrated on the various aspects of an organiza-
tion’s performance emanating from employee motivation. This questionnaire comprised closed ended
questions use for ensuring uniformity and more effective comparison between responses given by the
various respondents in each category. This is because closed ended questions are easily coded and ana-
lyzed. The questions were developed on a four-point Likert scales ranging from 1(strongly agree) to 5
(strongly disagree). This questionnaire was developed and reviewed by the researcher and his mates to
ensure it validity and reliability.
23
Validity of a study
Validity can be tested in different ways depending on the methods used by the researcher to conduct
the research and one of the ways to measure validity when carrying out a quantitative research is to
observe if the questions in the survey are understood equally by both the researcher and the respondents.
This identifies the fact whether an instrument measures what it is supposed to measure, (Hernon and
Schwartz 2009). The instruments used for this research was developed based on the objective of the
thesis. The researcher’s mates/colleagues made corrections and suggestions on the questionnaire. Reli-
ability of study Shows that if the same study yields similar results if repeated (Wilson 1995). This
means the results should be consistent over time by using a similar methodology. For quantitative re-
search, usually reliability is measured on three factors, i.e. the extent to which an instrument yields
similar results if repeated, results should be stable over time and results should be similar within a time
span. (Bryman & Bell 2007.)
There are three different ways to assess the reliability of a study which are test retest reliability, internal
consistency reliability and alternative forms reliability (Malhotra 2007). The test retest reliability is
conducted twice, being that the condition provided should be similar in both cases to give similar re-
sults. In alternative form reliability, the survey is answered two times in two different forms while
internal consistency reliability summarizes the survey items. The copies of the questionnaire were per-
sonally administered by the researcher in the head office and in the Pietarsaari branch office. A research
assistant assisted the researcher to do the administration in Sotkamo, and Kokkola. Before these assis-
tants embarked on the administration of the questionnaire, the researcher had meetings with them whom
they were enlightened on how to carry out the exercise. This method though time consuming and labo-
rious, was adopted to ensure accuracy and reduce refusal, non-responsive or incomplete responses.
24
6 PRESENTATION AND DISCUSSION OF RESULTS
This section focuses on the presentation, interpretation and discussion of findings generated from the
field by the use of the questionnaire with 14 statements. There was a total of 160 coppies which was
aimed at the workers of PEPT OY to respond to and of which were from different nationality.This
coppies were distributed to the suppervisors to hand to the workers on the various work sites that were
going on during the time of the survey like the construction of tanks in UPM pietasaari and the repaires
of the YARO stadium.This data was colllected from the period of April to june 2018. The questionnaires
were printed out in papers and handed to the respondent to fill individually.It begins with the presentation
of demographic information, quantitative results, test of hypothesis, and discussion of findings.
Dem oragrphic information
Since the sample size comprised of both sex with people from different nationalities and age groups ,the
questions of this section was aimed at figuring out the total number of questionnaires answerd and
returned.Then follewed by the sex distribution and the marrital status of the employees of PEPT OY.
FIGURE 3. The response rate of the copies of questionnaires issued
The figure above shows the returned rate of the administered copies of the questionnaire. It indicates
that out of the 160 copies of questionnaire issued out to the respondents, 150 were correctly answered
94%
6%
Response rate of questionnaires
Number answerd and return
Number not returned
25
and returned giving a percentage returned of 94 while 10 copies were not returned giving a percentage
of 6.On he whole more copies of the questionnaire were returned than those withheld by the respondents.
FIGURE 4. Sex distribution of respondents
The figure above shows the sex of the respondents from which it is observed that 96 respondents
representing a percentage of 64 were males while 54 respondant representing a percentage of 36 were
females. Overall,there were more males than females.Also on work sites there were mostly males due
to the reasons that the work requires so much man power of which most of the females were not capable
of so most of them thus have most of the offices post and also post which are less strainous.
FIGURE 5. Marital status of respondents
Figure 5 above shows the marital status of the respondents from which it is observed that 112
respondents representing a percentage of 75 were single while 38 respondents constituting a percentage
of 25 were married. It is observed that there were more single respondents than those who are married.
64%
36%
Sex discription
male
female
75%
25%
Marrital status
Single
Married
26
FIGURE 6. How long have you worked with Pept OY
Figure 6 above depicts the longevity of service of the respondents with Pept OY from which it is
observed that 30 respondents constituting a percentage of 20 have served in this organization for a period
of 1-5 years, 52 constituting a percentage of 34 have worked with Pept OY for a period of 6-10 years,
31 respondents which make up 20% have served in the organization for a period of 11-15 years while
37 respondents which constitute 24% have worked in this organization for 15 years and above. On the
whole, majority of the respondents have served in this organization for a period of 5-10 years.
FIGURE 7. Branch offices of PEPT OY
Figure 7 above shows the number of respondents in each branch that answered and returned the
questionnaire from which it is observed that 34 respondents from branch A constituting 23% of the
respondents answered and returned the copies of questionnaire administered to them, 41 from branch B
constituting 27.3% answered the questionnaire, 21 respondents from branch C that make up 14.0%
answered the questionnaire while 54 respondents from branch D constituting a percentage of 36.0
answered the questionnaire.
20%
34%21%
25%
Longitivity of service
1-5years
5-10years
11-15years
above 15years
23%
27%14%
36%
Frequency
A
B
C
D
27
FIGURE 8. Positions held by respondent
Figure 8 above shows the posts occupied by the respondents who answered the questionnaire from which
it is observed the position of a general manager constituting a percentage of 0.7, while the branch
managers who makes up 2 percent answered the questionnaires.The 140 employees constituting a
percentage of 93.3 answerd the questionnaire while 6 board members that constitute 4.0% responded to
the questionnaire. On the whole, there were more employees who are the main labourers who work on
site than any other set of respondents who took part in the survey.
Evaluation of financial motivation
The second part of the questionnaires was is to examoine the effects of financial motivation on the
employees of PEPT OY.So the statements in this section are all related to know the if employees are
motivated financially will have any outcome on their job performance,if the employyes are satisfied with
the oay packages, and also if the are often offerd bonuses and promoted.
1, 1%
3, 2%
93%
4%
Post held by Respondents
General Manager
Branch Manager
Employees
Board Member
28
FIGURE 9. Financial Motivation triggers me to perform effectively and efficiently towards the
organisations goal
In respond to the main objective, the data presented above reveals that 47% of the sample size responded
answed the questioneer agreed that financial motivation gives them an eurge to perform effectively to
give in their best for the organisations growth.33% agree also to supporrt the fact that financial
motivation gives them a positive influence to workk more for the organisations growth.10% where not
for either the fact that they agree or disagree that financial motivation gives them the urge to increase on
their productivity.7% strongly disagree while 3% disagree that financial motivation has notin to add to
their outpot for the growth of PEPT Oy.
FIGURE 10. Increase in output quality of employees when satisfied with motivation offered them.
From the figure above 60 persons giving a percentage of 43 from the sample size of 150 employees who
responded to the questioner strongly agree to the fact that there is an increase in output quality of the
47%
33%
3%7%
10%
Influence of financial motivation
Strongly agreed
Agreed
Strongly disagreed
Disagreed
Nutral
43%
29%
14%
7%7%
Increase output
SA
A
D
SD
N
29
employees of PEPT OY when they are motivated. Also 40 respondents agree that motivation leads to an
increase in the output of the employees of PEPT giving a percentage of 29.10 persons were not for or
against the fact that motivation has an impact on their productivity.20 persons disagree that motivation
has an impact on the productivity giving a total of 14 percent while the remaining 10 persons strongly
disagree to the fact that motivation has an impact on their productivity giving a tot al of 7 percent.
FIGURE 11. Employees turn to be more efficient when satisfied with pay package
From the figure above ,out of the 150 respondents, 80 of them given a percentage of 53 strongly agree
to the fact that when ever they are satisfied with their paypackage, they turn to be more efficient.4o agree
that they too turn to be more productive when they are satisfied with their pay package making a total
of 27 percent.20 respondents were neither on the side to agree or disagree that they turn to be more
productive when they are satisfied with the paypackage with their reasons being that they are not
motivated byn money but by the working conditions and job satisfaction.10 persons disagree to the fact
that they are motivated when satisfied with their pay package while there was no one who strongly
disagreed to the fact that their out put turn to be more when satisfied with pay package.
Evaluation of organizational performance
The statements in this section is related to how the motivation given to employees by the organization
turn to have an impact on the organization’s growth, if pay package increase turn to have an influence
on the output of the employees for the organization.
53%27%
0, 0%7%
13%
Satisfied with pay package
Strongly Agree
Agreed
Strongly disagree
Disagreed
Neutral
30
FIGURE 12. Whenever employees of my organization are satisfied with their pay package, they tend to
be more efficient
From the figure above, out of the 150 persons who responded to the questionnaire ,60 of the give a
percentage of 40 strongly agree to the fact that when they are satisfied with their pay package they turn
to be more efficient. Also, 40 persons making 27 percent agree to support that whenever they are satisfied
with their pay package they turn to be more efficient.30 persons from the total respondents had a neutral
opinion and were not for against that a satisfactory pay tend them to be more efficient. A total of 20
persons strongly disagree and disagree that a satisfactory pay has no effect on their efficiency.
On figure 13, the aim here is to know if the there is an increase in the sales of the organisation when the
workers are satisfied with the level of motivation offered to them or there is no effect on the organisation
sales related to the motivation given to the employees.
40%
27%
6%
7%
20%
More efficient with satisfactory pay
Strongly agree
Agree
Strongly disgree
Disagree
nutral
34%
20%13%
13%
20%
Increase in organisations sales
SA
A
D
SD
N
31
FIGURE 13. There is always an increase in the organisations sales when workers are contended with the
motivation offered to them.
From the figure above,50 persons from the total of 150 who responded to the questioner strongly agreed
to the fact that there is always an increase in sales of PEPT Oy sales when employees are contented with
their motivation. In support 30 persons which gives 20 percent accepts to the fact that whenever em-
ployees of PEPT are contended with their motivation the company’s sales turn to increase.30 persons
strongly disagree while 20 also join to disagree to the fact that it is the motivational satisfaction that
turns to lead to an increase in PEPT OY sales.13 percent were neither for or against the support to the
fact that the employees motivation have any impact on the company’s sales.
In figure 14, the statements aim was to find out how much employees are satisfied with the motivation
given to them and to know if this motivation given to them now turn to have any impact on their job
such as an increase in efficiency and output.
FIGURE 14. The quality of employees’ output increases when they are satisfied with the motivation
offered to them
From the figure above, 80 percent of the respondents strongly agree that the quality of their output in-
creases whenever they are satisfied with the motivation given to them. Also 40 persons given a total of
27 percent agree to the fact that their quality of output increases whenever they are satisfied with the
motivation given to them.10 persons were neither for or against so remained with a neutral opinion .20
person with 10 each Disagreeing and strongly disagreeing to the point that their output increases each
time they are satisfied with their motivation offered to them.
53%27%
6%7%
7%
my output increases when satisfied with motivation
SA
A
SD
D
N
32
Evaluation of non-financial motivation
I this section, the aim was to evaluate the effects of non-financial motivation on the employees and to
know how much the employees are satisfied with the non-financial motivation offered to them and the
effects of this non-financial motivation on the company. So, in this section, some of the statements were
know if management recognize and acknowledges the contribution of employees, if the workers are
being promoted on a regular basis, and if the management acknowledges and respect their employees
and the safety measures and how secured the job is.
FIGURE 15. Evaluation of non-financial motivation
With reference to above figure 18 above, it is read that three of the four items meet the accepted criterion
of 3 where majority of the respondents opine that management recognizes and acknowledges the
contribution of all employees giving it a mean score of 3.04. It is equally realized from the table that
promotion of workers to higher grades is not done regularly as this item scored a mean value of 2.63
which did not meet the accepted criterion of 3.Moreover, it is also read from the table that safety
measures and recreational facilities are available in PEPT OY as this item scored a mean value of 3.11.
Finally, it is also noticed from the figure that management gives extra responsibilities to employees as
this item scored a mean value of 3.32. on the whole, PEPT OY puts in place nonfinancial motivation
schemes to its employees except for the fact that it does not promote employees to higher grades
regularly.
29%
25%14%
32%
Non financial motivation
Recognizes contributions ofemployees
Regular promotion of workers
Safety measures
Extra responsibility toemployees
33
Discussions
When looking at the survey as a whole, the majority of the responds were positive though there was
some respondents that were negative on all of their responds thus proving that they are not satisfied with
their job or working situations or the pay package and motivation giving to them or even personal
issues.The analysis of the results of this thesis confirms to Herzberg’s hygiene theory which states that
the performance of employees is either influenced by satisfiers (motivating factors) such as promotion,
responsibility and recognition among others as the analysis of the results in figure 14 showed that recog-
nition, safety measures and recreational facilities and responsibilities all met the accepted criterion of 3
except for promotion which failed to meet this criterion. This means that these elements of non-financial
motivation to employees have an influence on employees’ performance and hence the organisation. It
equally confirms to this theory as it is realised that the analysis of the results in figure 10 as it is noticed
that the demotivating factors influence the organisation’s performance. The results of the thesis also
relate to the theory X and Y of McGregor and the ERG theory of Aldefer as we notice that most of the
items in 10,11 and 12 met the accepted criterion of 3 which is interpreted to mean that both financial
and nonfinancial motivation have an influence on the performance of PEPT OY. This is particularly
evidenced in figure 12 where the analysis of results indicated that there are always improvements in
PEPT OY’S performance whenever employees are satisfied the both the financial and nonfinancial mo-
tivations offered to them. It equally showed that an increase in an individual’s pay package without a
corresponding increase to that of his counterparts will not affect any change in the performance of PEPT
OY. This is strictly in line with the ERG (Existence, Related and Growth) meaning that the existence,
relations between employees and the growth of all the employees all have an influence on the organisa-
tion’s performance.
Lahti (2008) proposes deserting the basic means where all workers are dealt with and viewed similarly.
She implies that organisations can take cover behind this system and abstain from dealing with complex
inquiries, for example, multicultural issues. The initial phase in raising the awareness of multi-
multicultural issues is to straightforwardly discuss the subject regardless of whether it feels new and
awkward to the employees.So PEPT OY would profit by gathering a group of its foreign workers to
further analyze the opportunities for widening their multi-cultural mindfulness. Dialog with the group
of both outside and national workers could be brought together to open up the topic and conceptualising
thoughts before making further decisions on how to motivate their employees.
34
Also another means to motivate the employees is have a recreational day in which the topic could be
employees motivation and multiculturalism and it should include all the employees of PEPT OY. On the
event,representatives from different societies could demonstrate some of their cultures and traditions by
dansing and singing songs to display their culture so as to help educate other employees of their own
ways of life so as to help each other better have an understang about their differnt culturs. Awards could
be handed to employees with good performance and also talks of motivation to all the employees to help
strenghtening their team work.The organisation could have its own spatial discount prices for their
employees who wish to render the services of the company such as free transportation of the materials.
Since motivation varies from culture to culture. Employees from out side Finland that work at PEPT OY
could get individual training programmes and also a help in learning the national language organised by
the company as an added point and as a means of motivation for the employee and also as a stepping
stool for them to have a carrier in the organization. During this training the distinctions in cultural
motivation could be raised and the representatives would get the opportunity to straightforwardly talk
about their arrangements and dreams for their future in the company.
35
7 CONCLUSION
For employees to decide on their future in a company,it greatly depends on the approach in which they
are being treated by the management within the company. For a manager to be successful, it is necessary
to have an idea about the wishes of the employers you are about to lead. Employee motivation has an
influencee on the profitability of the organisation and therefore, the managing board must continuously
design an put in place strategic motivational structure that will at least be able to meet the desires of their
employees. Due to the importance of employee motivation in achieving the success of a company, many
scholars have developed theories aiming to explain how best employees can be motivated so that
maximum performance can be achieved. However, we must have in mind that human behaviour is very
complex and dynamic by its very nature in effect and cannot be exhaustively explained by just
theories.The basic truth is that theories are sometimes ideological and are aimed at satisfying the
researchers inquisitiveness. This explains why the theories used in this research are guided and focus on
the research topic. A relationship between theoretical ideologies and practical realities on how
motivation could be used as a tool to improve employees’ performance was aided with the help of a
questionnaire that eased the researcher’s way to understand the opinions and believes of the employees
of PEPT OY. The research work also brings out the reality of the fact that every individual has a different
need and ambitions as soon as they step foot into an organization as an employee. Motivating these
employees now depends on the organisations ability to identify and satisfy its employees needs and
ambitions. In general, this study highlights those areas that need to be improved upon to ensure the
success of the organization.
This thesis has so far explored the effect of the motivation on the performance of an organisation using
PEPT OY as commisioner. Two key elements of motivation (financial and nonfinancial motivation)
have been examined and how they affect the performance of an organisation.The results obtained
indicated that these two elements have a great effect on the performance of PEPT OY. Therefore,
motivation is one of the most essential activities that should not be undermined by an organisation no
matter the size of the organisation and how minimal the motivation may be.The process of writing this
thesis was quite educating and the writer decided to chose the topic organisational performance as an
outcome of employees motivation of which i am so thankfull for the collaboration of PEPT Oy and its
employees for making it posible for me to have all the data and information needed for this work.After
discusions with the management of PEPT OY about the best ways to conduct this study,a quantitative
36
survey was chosen as the most appropriate for the reserch. The based on the assumptions of truthful
responds would be cultivated when the respondent had the opportunity to be completly impersonal.
The process of collecting the data was not so smooth in that the respondents were from different
nationalities and most could not speak english too well so collecting the data had to take a longer time
than normal for one had to be present to translate the questions and explain so as for the respondent to
understand.The writer was satisfied with the responds of the questionaires even though it took 2 months
get 150 copies of out of 160 of questionnaires which was given out. Though the opportunities to elaborate
of the responses was limited so would have been better to add more opend ended questions to figure out
why they responded in a particular manner.
Although the motivation offers adopted by PEPT OY may have proven successful in the past, current
knowledge tells us that technological innovations and the business environment are posing a lot of
changes on the factors motivating human beings to work effectively. Organisations needs to be dynamic
and accustom themselves to the changing times and needs to gain competitive advantage over competi-
tors. Thus, providing these organisations with the knowledge to be proactive to these contemporary
challenges is the major preoccupation of modern researchers. Based on the aforementioned challenges
and the limitations of this study, the researcher heartily recommends the following to the case study
organisation and other organizations. That it should put in place good motivation schemes like rewards
that will enable the employees to put in their best and help the organisation to attain its stated goals and
objectives.
Furthermore, the theoritical part of this thesis talks on financial motivation such as salary,
commissions and bonuses offered to employees a s compensation for services rendered should be in
line or above those offered by competitors in the same area.The organisation should equally involve
its employees during any decision making process in the organisation by consulting them before taking
major decisions that affect their job roles and accepting criticisms from subordinates and making
necessary amendments for the betterment of the organisation if they are positive.Also,management
should encourage employees who record high performance and exhibit a high sense of duty
consciousness by ways of praises, recognition and even promotion
The results of this thesis showes that a majority of the employees of PEPT OY are satisfied with the
motivation given to them and the way their managers are leading them and also with the working
conditions and job safety.This chosen sample size seemed to agree that that the level of motivation and
37
employee commitment in PEPT OY seems different from other companies.The results shows that the
employees are satisfied with the management and their opend relationship with their employer.Though
a few employees seems very unsatisfied from their responds and thus the writer wish the management
should have concern on this employees so as to get them satisfied and get the best out of them as well.
Another area of concern revealed during the study was the failure of workers to completely use their
skills. The organistion ought to subsequently organise training programs so that workers can improve
on their knowledge and skills so that significant errand could be appointed to them allowing the workers
to completely utilize their ability and also this makes an inclination inside them that they are a significant
part of the organisation .Further more, it was likewise understood that compromise strategies were not
the best and was totally neglected so there are conflicts which frequently break out among workers that
influence their working habits and causing some to quite and also discouraging team work.This could
be mitigated by making a leading body of individuals which holds regular meetings and bring out
answers for issues in a reasonable way.
Furthermore, it was noticed that some of the respondents gave their opinion that the relationship and
communication flow between workers and manager is poor. So, to solve this problem and keep
employees comfortable and happy, the management of PEPT OY should give chance to the flow of
information and ideas complimented with a possibility for feedback. This will therefore have a
motivational effect since employees will now feel free to tell the organisation their problems and
contribute useful ideas for the growth of the organsation.
38
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Appendix
Questionnaire
Dear respondent,
I am Mbah Juel Mundua final year student of Centra University of Applied Sciences studying
International Business.I am carrying out research on the topic Organisational Performance As An
Outcome Of Employees Motivation In PEPT OY .I will be very grateful if you can create time out of
your schedule and answer these questions. Your information will be treated with strict confidentiality
and for the purpose of this study.
Thank you for your cooperation.
SECTION A: DEMOGRAPHIC INFORMATION
Please place a tick (✓) on the option that corresponds to your opinion
Sex: Male Female
Marital status: Single Married
Age: 18-25 years 25-32years 32-39 years 39 years above
Level of education: Basic education Secondary Education University graduate others
How long have you work: 1-5 years 5-10 years 10-15 years above 15 years?
Name of branch……………………………………………………………………………
Post held…………………………………………………………………………………...
Place a bold tick (✓) on the various forms of motivation you are given in your job.
Key: SA= Strongly Agree, A=Agree, UN= Undecided, D=Disagree, SD=Strongly Disagree
SECTION B: EVALUATION OF FINANCIAL MOTIVATION
S/N ITEM SD D UN A SA
1 Financial motivation triggers me to perform effectively and
efficiently towards the achievement ofthe organization’s goals
2 I am satisfied with the pay package my organization offers me
3 Financial motivation to my colleagues triggers them to put in
extra effort towards the attainment of the organization’s goals
4 I am often given commission, bonuses and allowances on
regular basis
5 In my organization, we are often paid for overtime
43
SECTION C: EVALUATION OF NON-FINANCIAL MOTIVATION
S/N ITEM SD D UN A SA
6 In my organization, management recognizes and
acknowledges the contribution of all employees
7 Promotion of workers to higher grades in my
organization is done regularly
8 I am respected by management at my job site and myjob
is also secured
9 Safety measures and recreational facilities are available in my
organization
10 Management gives me extra responsibilities which boast my
morale
SECTION D: EVALUATION OF THE ORGANISATIONAL PERFORMAMNCE
S/N ITEM SD D UN A SA
11 Whenever employees of my organization are satisfied with
their pay package, they tend to be more efficient
12 The quality of employees’ output increases when they are
satisfied with the motivation offered to them
13 The productivity of my organization tend to increase
when management promotes employees and recognizes
the great role the play in the organization
14 There is always an increase in the organization’s sales and
profit when workers are contented with the motivation offered
to them